Hungarian banks would have to place approximately HUF 600-700 billion annually in order to increase their annual mortgage portfolio by 6-8%. We can even reach this level next year, as over the past 12 months about $ 380 billion of new home loans have come to fruition, along with loan repayments, and thanks to CSOK, the pace of expansion in new placements may remain.
By all accounts, Hungarian mortgage lending is facing a boom
The 362 billion forints placement last year means practically one and a half times more in the Hungarian mortgage lending business, so we can rightly say that the dream of sleeping rose is awakening retail mortgage lending.
The market for new homes has bottomed out before the real rise of CSOK, as evidenced by the breakdown of housing loans by use. At the end of 2015, 60% of home loans were used to purchase used homes, while an additional 32% was used for expansion, redemption and renovation.
Since settlement (within 11 months), the nearly $ 3,000 billion housing loan portfolio has fallen by 4% and the total retail loan portfolio by 6%, due to the fact that borrowing is still outpaced by repayments. It is estimated that banks would need to lend $ 600-700 billion a year in new housing loans to achieve the MNB’s vision for the banking sector, with 6-8% portfolio growth and 2-3% GDP growth.
We have reached the point of having a tolerable repayment installment
By now, we have reached the point of having a tolerable repayment installment even with an interest rate fixation over 5 years, which is why the rate of loans with longer interest rates is slowly but surely rising.
We believe that the above credit growth is no longer considered such a distant opportunity by the central bank, as we may reach the desired level next year, assuming the above-mentioned one and a half multiplication of new loans.
Buy a home and would like to negotiate with banks
If you are looking for a loan to buy a home and would like to negotiate with banks as an equal partner, get help from your Regan credit broker! We’re on your side!
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